February 5, 2010

Remember this post of mine about a WSJ op-ed by Bruce Ackerman and Congressman David Wu proposing a $50 tax credit for people to donate to presidential candidates? It was presented as a kind of antidote to the Citizens United case, which recognized a First Amendment freedom for corporations to engage in political speech.

I had some questions about the proposal because, for one thing, it's about enabling people to channel money to candidates, which is different from doing your own speaking. I worried about those immediate electronic refunds:

Ah! How the cash could flow! Just push buttons on line. Is that too easy? Do you worry about corruption? Does it unduly favor the kind of people who use computers and credit cards... or is that really everybody now?

Professor Ackerman emailed me to say that he had answers to my questions in his book "Democracy Dollars" (co-written with Ian Ayres and not with Wu), and I asked for some electronic text, which he sent. From pages 69-70:

In our brave new world, Americans simply go to their neighborhood ATM and vote their Patriot dollars under three ground rules.

Vote. Presumably in the lingo of the book, the $50 donation is equated to a vote. You get a donation to channel to someone, which is sort of like voting.

The first gives each voter five days to change her mind. This not only encourages sober second thought but makes a black market tough to organize. To see why, suppose that a fraudster offers Citizen X $20 in private money if she allows him to accompany her to the ATM and watch her transfer 50 Patriots to his favorite candidate. X accepts the offer, executes the transaction, takes the $20 — and then returns the next day to countermand the order!

That assumes Citizen X cares about politics... and isn't afraid of the fraudster. I think a lot of people would gladly pocket the $20 and not give a damn about where the $30 went. It's not like they have a way to get their hands on the $30. They have to give away the $50, so there will be endless schemes to get hold of those millions of $50s.

Not a good deal for the fraudster, especially if we add two rules. Patriotic contributions should be anonymous — making it impossible for the fraudster to contact his favored beneficiary to see whether the transaction sticks.

Citizen X would need to believe that anonymity is secure.

And the ATM will accept only Patriot accounts linked to standard electronic cards. This prevents the fraudster from demanding possession of X's ATM card for the five-day cooling off period, thereby making it impossible for her to change her mind. While X might give away a free-floating Patriot card, she will refuse to surrender a standard credit card to somebody who is not, by definition, very trustworthy. If she ever gets her American Express back, she may find not only that her Patriot account is empty but that the fraudster has used it to finance his trip to Las Vegas!

Does everyone have a credit card? Do we really want a government program bound up in the operations of private credit card companies? Will the credit card company get a cut of all these transactions? Or are we going to end up with a government credit card company?

As a final anticorruption safeguard, all Patriot accounts will expire after six years. Renewal will be easy — a citizen must simply vote once during the period, and swipe his card once again through the electronic reader available at his polling place. Regular renewal prunes the files of dead and incapacitated cardholders-cutting out another source of fraud. To be sure, it also eliminates people who fail to vote once in six years. But this seems entirely acceptable. Nonvoters can regain their patriotic status simply by reregistering.

I also asked whether "incumbents [would] snap up the money and make it even harder for newcomers to get started." And Professor Ackerman pointed to this, at pages 78-79:

Fundamental fairness may be compromised if one candidate conducts an expensive primary battle while the other doesn't. The problem is at its maximum when a sitting president is running for reelection. The man (or woman!) in the White House comes to the table with such great advantages that he may avoid a significant challenge in the primary. This will allow him to stockpile the pool of Patriots from members of his own party while challengers raise and spend large sums for the privilege of running against him in November. By the time the out-party selects its candidate, the successful nominee may confront a serious problem raising patriotic donations from the party faithful. Many will have spent their wad during the primaries, leaving the challenger to face an incumbent sitting on a large patriotic stockpile. It is tough enough ousting a sitting president without giving him this further advantage.

The problem is of constitutional dimension. After Franklin Roosevelt's four-term presidency, the American people said "never again," and enacted a constitutional amendment checking the power of incumbent presidents by limiting them to two terms in office. Our approach to Patriot is guided by this decision. In the case of incumbents running for reelection, we divide the 25 Patriot dollars allocated to each presidential account into two subaccounts-allocating $10, say, to the primaries and $15 to the general election. This will permit the out-party to wage a fierce struggle over the nomination without compromising its capacity to run an effective race in the fall.

The system is infinitely tweakable. I note that it will be tweaked by incumbents and the party in power. Why would they "permit the out-party" to do anything they don't want? Once the system is in place and all that money is at stake, the game will be played by ambitious politicians, not by neutral wise men (and wise women!) trying to perfect democracy.

I also asked about what was going on in the states that had programs like this. Here, Professor Ackerman quoted a law review article by Thomas Cmar, "Toward a Small Donor Democracy: The Past and Future of Incentive Programs for Small Political Contributions," 32 Fordham Urban Law Journal. 443, 462-75 (2005):

Oregon has the highest participation rate in the country for a political contribution incentive program, and in large measure this is due to the state providing the credit for contributions to PACs as well as candidates and parties. Many PACs solicit credit-eligible contributions aggressively, promoting the credit as a central aspect of their fundraising appeal. The result is that in recent electoral cycles, a substantial portion of contributions on which a tax credit was claimed went to PACs rather than to parties or candidates. ... Data from Oregon suggests, however, that Oregon's higher participation rate is driven by the mobilization efforts of contribution recipients."

Is this what law professors spend their time dreaming up? It's nuts, insane, and fucking retarded! Dude... why is it so important that a certain definite discrete amount be given to grease the wheels of the existing-- and corrupt-- system? If I'm inspired I'll give $2400. If I'm not inspired then I will give NADA because apathy is a perfectly acceptable and reasonable position. I can vote with my ZERO! But nooooo! Not in the Herr Professor Ackerman's world! In his distorted lawprof universe we are all equally motivated, our motivation comes out to exactly $50, and the accidental advertising-based system we currently find ourselves in needs to be permanently cemented into place.

A few years ago I faced the choice of going to law school or becoming a pornographer. I chose the later. Stuff like this just reassures me that I made the right choice.

Pass as well. Minnesota already has a $50 per person political campaign contribution “refund” program. You write a check for $50 to a candidate or political party and the State of Minnesota “refunds” your contribution from the general fund. Meaning other taxpayers are forced to pay for your preferred choice of candidate or party. This proposal would make things worse by expanding the scope of groups feeding at the taxpayer trough to include PACs as well. As someone who thinks that we ought to reduce the ability to feed at the taxpayer trough, this proposal takes things in the wrong direction IMO.

Of course, because we all agree political campaigns just don't get enough money and it's a great way to spend it! Let's make it $1000 each and get things happening. More attack ads, more attacky, and throw in some of those evil alien sheep ta boot. Preempt all regular programming so we can watch them for hours.

If the NYT can qualify to run for office, then they have finally figured out how to get paid for their content. And who would dare to fight the NYT? If candidates have to be living things, then never mind.

The wording of "vote" for donation is odd. Is the intention really to equate money with votes?

It might be. Seems to me most campaign finance reform is aimed at leveling that particular playing field, take private money out of it, and get those running for office to take federal or state funds to pay for their campaigns. We saw how well that worked last presidential election.

Calling it a Patriot account gives me the same screaming heebie-jeebies as Patriot Act, Homeland Security, and New World Order.

Should this scheme go into effect I guarantee it will be alleged that people w/o credit namely minorities and the poor, will be said to be 'disenfranchised' from participating in the political process by a 'scheme designed to keep them out'.

Enter the solution to "incentivize" (in the only form the gvment knows how) credit card companies into giving credit to people who would not otherwise have it with the caveat that the credit is backup by the full faith and credit of the federal gvment.

With this scheme we would not only create more gvment debt but also pile on another credit bubble into an already paupérrima economy ala Fannie Mae Freddie Mac.

Actually... what this made me think of while sorta-kinda skim reading over the quoted bits and Althouse's comments was MMORPGS and all of the rules of game play, exploits and work arounds.

The game designers set up a system of game play and the players put an incredible amount of effort into understanding it in mathematical detail in order to work the system. An "exploit" is considered going over the line to cheating, but the rest is considered smart game play... necessary game play, even.

As a player you learn what the game will do in response to what you do. And then you play it.

Political ads? In the age of Facebook and blogs? Why? Why [Why *the fuck*] would I pay someone to advertise? Do I think the world lacks sufficient advertisement? Is that what's missing in my life? Do I suffer from insufficient exposure to advertising?

The best any kind of advertisement can do is achieve some McLuhan-esque meta-discourse. At worst, it stirs some emotional response. It's killing us.

I get insulted by all the money that flies to rich folks already. Millions for what? You wanna make a contribution somewhere? Give to someone who needs it, where you can actually see the results of it.

I'll gladly give to James O'Keefe's legal defense fund, but not any politician's PAC. Let 'em call those "wealthy donors" I'm always hearing so much about. (John Edwards got "Bunny" Mellon to send him all kinds of duckets for hiding Rielly Hunter.) It just strikes me as wrong that Americans are more likely to blow their money on politicians - and then demand they help the poor - than being able to look to each other.

It is virtually imposable today to not have advertising of some kind in your line of sight 24/7. Look around you right now. It's as ubiquitous as air. Even if you hike into the wilderness you will see refuse with ads on it, a government placard reminding you of who's jurisdiction your in, or a tree carving advertising someone's favorite band or main squeeze. Advertising may be the quintessential human activity. Aliens upon arriving will first ask: "Don't you creatures ever shut up?" Why no, no we don't.

Paying people $10 to send their fifty Patriots the way you direct pays off at a 25% profit if a mere one quarter of the people taking the bribes are either "stays bought" honest or people simply don't care enough to reverse themselves before the deadline.

The first gives each voter five days to change her mind. This not only encourages sober second thought but makes a black market tough to organize. To see why, suppose that a fraudster offers Citizen X $20 in private money if she allows him to accompany her to the ATM and watch her transfer 50 Patriots to his favorite candidate. X accepts the offer, executes the transaction, takes the $20 — and then returns the next day to countermand the order!

Alternate scenario: Ward Heeler Tony escorts Person X and everybody else in the neighborhood to the ATM and watches them make the contribution. If Person X cancels the transaction, Ward Heeler Tony gets tipped off, comes back and beats him up with a stick. Plus, he never gets an appointment at the National Health Care clinic ever again.

Technology can't paper over corruption and crime. Criminals want to be corrupt, and will be just as empowered by technology as anybody else.

I just want government to leave me in possession of my own money and let me decide what I want to do with it. I might, for example, want to buy some stock in a company whose board of directors is committed to spending 1% of its operating budget to oppose creeping statism.

Or I might want to spend it on advertising ridiculing Bruce Ackerman. Yeah, that's the ticket.

This is a perfect example of how someone (here, Ackerman) can be very smart and yet ridiculously foolish.

I'll admit that i ignored ackerman's proposal because frankly his proposals only have a tenuous relation to reality.

So, um, the idea is to let it all be done with computers.

You know, because computers can't be hacked.

i would add that the Bartlett flag salute case might present problems for the idea of forced speech.

Oh, and it increases spending in the middle of record debts. For instance, you remember those cash for clunkers deals? A max of $4,500 per car. It cost $24,000 per car to distribute that money. And something tells me that it doesn't get much cheaper as the amount gets lower.